Does My Business Need a Chip Reader?

After a wave of crimes involving the theft of customers’ credit and debit information through mass data breaches in retail stores through credit card swipe machines, chip and PIN credit cards began to gain serious public attention. If your business is still using older magnetic swipe credit card readers, there are some security vulnerabilities.

Chip Card Readers

Unlike the standard credit card reading process that gets conducted through a magnetic stripe, chip readers access information that is stored a small computer chip instead. With the chip card reading process, it’s no longer necessary for customers to sign the screen in order to complete the transaction. All that needs to happen to complete the chip-read transaction is for the customer to input their four-digit PIN into the reader, which many customers may find more convenient and streamlined.

Square Readers

With a square reader and an application that works in tandem with it, transactions can be completed simply by connecting the reader to a mobile device’s headset jack. Once the square reader and the device have been connected to one another, the customer can add all of their desired items to the current sale’s shopping cart as they see fit.

Square readers make it easy for a small business to update to a point of sale system that is not a large investment to purchase and setup. For small to medium sized businesses and restaurants, the square reader is a great choice to update.

The Demand for Chip Readers

Chip readers were in development before massive data breaches exposed millions of customers’ personal information to hackers, but it was those hacking incidents in question that really gave momentum to push for more secure transaction processing technology.

Chip readers allow merchants to offer customers ways to purchase their wares that don’t leave all of their data nearly at as much risk as the conventional payment methods do. While it’s not necessary for a merchant to have a chip reader, they’ve more or less become the norm for customer security assurance across the globe.

Timeline for EMV Chip Card Liability Shift in the U.S.

Early on, the majority of liability for counterfeit card fraud laid with the specific card issuers for those affected by frauds. In October of 2015, the liability for counterfeit card fraud shifted over to merchants. The shift in liability occurred to reflect the obligation of merchants to install proper customer information protection solutions in their credit card chip reader or EMV chip card reader technology.

What is Fraud Liability?

With fraud liability policies in place, a cardholder is safe from being held legally responsible for any unauthorized charges made using their illicitly obtained credit card information. Should the card ever be stolen or lost, cardholders can have the peace of mind of knowing that they won’t be held accountable for any potential havoc that fraudsters wreak using it. Fraud liability applies to any purchases that are made via telephone, mobile, online or in-store. The sooner a card issuer is made aware of an unauthorized charge incident through a credit card chip reader or EMV chip card reader, the sooner an investigation can be conducted.